SEBI Proposes Mandatory Digital Assurances of Financial Statements of Top-100 Listed Companies from 31st July
Moneylife Digital Team 04 February 2025
Market regulator Securities and Exchange Board of India (SEBI) proposed mandating digital assurances of financial statements of top-100 listed companies to create greater transparency and trust in the financial disclosures made by the listed entities. Reporting on digital assurance will be applicable for the top-100 listed companies from FY24-25. These companies will submit management statements and auditor's reports on digital assurance by 31 July 2025 for FY24-25, the market regulator says.
 
In a consultation paper for management statement and auditor's or independent practitioner's report on digital assurance based on information obtained from external data repositories, SEBI says, "As a continuous endeavour to enhance the quality of financial reporting being done by listed companies and in order to provide greater investor protection, it is proposed to mandate a separate report on digital assurance of financial statement. The report will increase transparency, improve disclosure standards and enable better enforcement, and thereby provide greater investor protection and trust in the ecosystem. 
 
"Based on discussions with market participants, it has been decided that using a technical guide prepared by the Auditing and Assurance Standards Board (AASB) and Digital Accounting and Assurance Board (DAAB) of the Institute of Chartered Accountants of India (ICAI), a framework based on information obtained from external data repositories, be mandated for management statement and auditor's and independent practitioner's report on digital assurance," it added.
 
The report should be prepared by an auditor who has subjected himself or herself to the peer review process of the ICAI and holds a valid certificate issued by it, it added.
 
The technical guide primarily focuses on sources of external audit evidence and information available and how it can be utilised by the members in their audit procedures. "It is noted that the technical guide in itself does not require any separate reporting by auditors on these aspects. Further, no responsibility is cast on the management of the listed entity to provide this information obtained from external data repositories to auditors or provide access to such information to auditors," SEBI says.
 
The market regulator has asked for public comments on the draft circular by 24 February 2025 through this link: https://www.sebi.gov.in/sebiweb/publiccommentv2/PublicCommentAction.do?doPublicComments=yes
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